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Choosing Opponents in Prisoners' Dilemma: An Evolutionary Analysis

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Author Info
Engseld, Peter () (Department of Economics, Lund University)
Bergh, Andreas () (Department of Economics, Lund University)

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Abstract

We analyze a cooperation game in an evolutionary environment. Agents make noisy observations of opponents’ propensity to cooperate, called reputation, and form preferences over opponents based on their reputation. A game takes place when two agents agree to play. Pareto optimal cooperation is evolutionarily stable when reputation perfectly reflects propensity to cooperate. With some reputation noise, there will be at least some cooperation. Individual concern for reputation results in a seemingly altruistic behavior. The degree of cooperation is decreasing in anonymity. If reputation is noisy enough, there is no cooperation in equilibrium.

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Publisher Info
Paper provided by Lund University, Department of Economics in its series Working Papers with number 2005:45.

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Length: 23 pages
Date of creation: 29 Nov 2005
Date of revision:
Handle: RePEc:hhs:lunewp:2005_045

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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
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Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/
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Related research
Keywords: Cooperation Conditioned Strategies Prisoners Dilemma Signaling Reputation Altruism Evolutionary Equilibrium

Find related papers by JEL classification:
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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    Other versions:
  2. Rigdon, Mary & McCabe, Kevin & Smith, Vernon, 2001. "Sustaining cooperation in trust games," MPRA Paper 2006, University Library of Munich, Germany, revised 23 Apr 2006. [Downloadable!]
    Other versions:
  3. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January. [Downloadable!] (restricted)
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  4. Binmore, Ken & Samuelson, Larry, 1999. "Evolutionary Drift and Equilibrium Selection," Review of Economic Studies, Blackwell Publishing, vol. 66(2), pages 363-93, April. [Downloadable!] (restricted)
  5. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August. [Downloadable!] (restricted)
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  6. Robson, A.J., 1989. "Efficiency In Evolutionary Games: Darwin, Nash And Secret Handshake," Papers 89-22, Michigan - Center for Research on Economic & Social Theory.
  7. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-60, June. [Downloadable!] (restricted)
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  10. repec:att:wimass:199529 is not listed on IDEAS
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